No Income No Job No Assets
A ninja loan is a type of subprime loan issued to borrowers with No Income, No Job, (and) no Assets. The phrase was coined by HCL Finance as a name for one of their finance products.
They were especially prominent during the United States housing bubble of the 2000s but have gained wider notoriety due to the subprime mortgage crisis in July/August 2007 as a prime example of poor lending practices.
NINJA loans. Just another moniker for the infamous “no-doc” (no documentation) loans. AKA “liar loans”. Made famous by 3:00 a.m. TV con artists selling get rich quick schemes involving buying real estate with no money down and flipping it. The Community Reinvestment Act greased the tracks for this sort of thing by giving lawsuit firepower to “under-served” communities to sue lenders who resisted. Reputable firms pulled out and were replaced by hucksters who prepackaged FHA insured mortgages derived from phony appraisals and sold them to Fannie Mae and Freddie Mac.
There was a huge bust in Atlanta area in about 2005 involving hundreds of people (many from Nigeria) who were running a mortgage fraud ring composed of corrupt mortgage brokers, appraisers, and pools of straw buyers packing “under-served” credentials. It’s funny that the lenders who participated in the scam got higher CRA audit scores.